samiksha nagar (Student CA Final) (168 Points)
22 November 2013A body corporate is receiving manpower supply services from non corporate agency. in this case, receiver is liable to pay ST on 75% of the services received. I wish to know the following points regarding this:
1- how much cenvat can be availed?
2- what will be the accounting entries for st liability on RCM, cenvat & other relevant ledgers?
CA Kanagaraj R
(CA, CS & CWA)
(86 Points)
Replied 22 November 2013
Cenvat can be availed on 25% on the basis of vendor's invoice.
Balance 75% paid by the recepient can be availed as cenvat based on the sevice tax challan after making payment of tax.
As regards accounting is concerned:
Firstly liability of service tax has to be created with a debit to a Suspense A/c
After making payment of service tax, the amount in suspense A/c can be transferred to regular cenvat credit A/c.
Otherwise, all other accounting will remain the same.
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